Trump shattered Canada’s old US relationship. Carney is building a new
one in Europe
[September 21, 2026] By
ROB GILLIES
TORONTO (AP) — For nearly four decades, Canada built its economy around
closer integration with the United States. President Donald Trump has
turned that dependence into leverage, imposing tariffs, threatening
Canada’s sovereignty and openly seeking to pull Canadian industrial
production south.
Canadian Prime Minister Mark Carney has moved on. Rather than return to
trade talks or wait for the next U.S. president to restore the old
relationship, he is urgently building a future in which Canada is less
dependent on America.
Last week, Carney embraced the prospect of Canada becoming the European
Union’s first associate member, not as a step toward full membership,
but as a way to reduce Canada’s dependence on any single country without
ceding control over its own decisions.
“There is now a price to be paid for access to the United States
market,” Carney said Sunday, pointing to tariffs, U.S. investment
commitments and demands for domestic policy changes.
Carney told the European Parliament on Thursday that countries need
enough economic strength to keep any one power from dictating their
choices.
Building options beyond the US
He carried that argument into a meeting Sunday with French President
Emmanuel Macron in Saint-Pierre-et-Miquelon, the French territory just
off Newfoundland’s coast.
“Canada and Europe will build an alliance for the future that will
strengthen our collective resilience so we can live our lives as we
choose based on the values that we share,” Carney said while standing
alongside Macron.
Carney’s relentless schedule reflects the urgency of his push to build
alternatives to the United States.
He began last week in Toronto hosting some of the world’s biggest
investors, flew to Strasbourg, France, for European Commission President
Ursula von der Leyen’s State of the European Union address, raced to
Liverpool, England, to meet Britain’s new prime minister and returned to
Strasbourg to address the European Parliament.
He met Macron in Saint-Pierre-et-Miquelon before flying back to Ottawa
to meet Norwegian Prime Minister Jonas Gahr Støre. On Monday, he is set
to open a new session of Parliament before heading to New York for the
United Nations General Assembly.
Europe becomes the alternative
Trump has suggested Canada’s closer relationship with the EU could
amount to a “hostile act” and threatened “very heavy tariffs” on Europe
if he judged the move unfriendly.
Canada could become a test case for other middle powers trying to avoid
being pushed around by larger countries. In his speech at the World
Economic Forum in Davos, Switzerland, in January, Carney argued that
“middle powers must act together,” warning that “if you’re not at the
table, you’re on the menu.”
Støre echoed Carney on Sunday, saying tariffs should not become “a
weapon to be used against countries, because we will all end up losers.”
The next major step in shaping that proposed relationship is an Oct.
29-30 Canada-EU summit in Montreal.
Unwinding 40 years of dependence
For Canada, that means undoing some of the reliance developed over
nearly 40 years.
The 1989 Canada-U.S. Free Trade Agreement and later NAFTA deepened
integration, creating cross-border supply chains in autos, energy and
manufacturing. Roughly 70% of Canada’s exports went to the U.S. Europe
remains nowhere close to replacing the U.S. market.
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Canada's Prime Minister Mark Carney, front left, speaks with
European Commission President Ursula von der Leyen at the European
Parliament in Strasbourg, eastern France, Sept 17, 2026. (AP
Photo/Pascal Bastien, File)
 Carney walked away from trade
negotiations in August rather than accept terms he said Ottawa could
not live with. The talks remain suspended, and Carney said Friday
that leaving the table was the right decision.
“It was easy business, but it meant we relied too much on one
economic partner,” Carney said recently. “That time is over.”
Investment chair wants to ‘crank the non-US’
Dominic Barton, Carney’s pick to chair Invest in Canada and a former
global head of McKinsey & Co., said diversification does not mean
abandoning the United States.
“We can’t complacently count on it,” Barton said. “It’s not about,
let’s not do stuff with the U.S. It’s let’s crank the non-U.S. Let’s
be way more ambitious on that side.”
Barton, a former Canadian ambassador to China, said Canada has been
too inward-looking.
“We are not very global,” he said, calling Trump’s pressure a “jolt”
Canada should use to build more global companies.
Carney wants to double non-U.S. trade over the next decade and aims
for a free-trade deal with India by year’s end. He said Canada’s
tariff-free access to 1.5 billion consumers could double within six
months.
Canada sells the trust America is losing
Carney is trying to turn growing doubts about the U.S. as a
predictable place to invest into a Canadian advantage. His pitch to
global capital is increasingly clear: where Trump’s America uses
tariffs and uncertainty as leverage, Canada offers stability, rule
of law and reliability.
“The most sought after commodity today is trust,” Finance Minister
François-Philippe Champagne said. “The world has changed and America
has changed. And I think the world has taken notice.”
Trump may ultimately have done Canada a favor by forcing the country
to confront its dependence, Barton said.
“Maybe in 20 years, we’ll thank Trump for shaking us out of our
complacency,” Barton said. “Let’s use the moment.”
The ambition has limits. EU “associate membership” does not yet
exist, and Europe cannot quickly replace a U.S. market that buys
nearly three-quarters of Canadian exports.
But Carney is hardly alone in concluding that Canada must rely less
on the United States.
Former Conservative Prime Minister Stephen Harper, from the
opposition Conservatives, said the government “had no choice but to
take this path.”
That conclusion was particularly difficult for Harper as “one who
has long been and known to be a great admirer of America” and who
regarded Canada’s close relationship with the U.S. as “among this
country’s most precious assets.”
The current U.S. administration now views the countries’ economic
integration as incompatible with Canada maintaining its sovereignty,
he said.
“Thus, to maintain that sovereignty, we must pursue diminished
reliance on the United States,” Harper said. “I do find this all
very sad, just as equally necessary.”
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